USD/CAD remained steady around 1.3700 after significant data releases affected the pair. Canadian GDP showed a 0.3% increase in April, indicating a robust economy. US PCE inflation data, which is the Fed’s preferred measure, also showed progress towards the 2.0% target.
The currency pair stayed flat at 1.3700 on Friday following the release of Canadian economic growth data and US inflation data, impacting investor evaluations. Starting in the 1.3730s during the Asian session, the pair declined as the Canadian Dollar (CAD) strengthened against the US Dollar (USD). However, a late rally by the USD brought the pair back up as the day progressed.
Canadian GDP data for April, released at 12:30 GMT, accelerated the CAD’s appreciation, leading to a decline in USD/CAD. The 0.3% growth in April, in line with analysts’ expectations, was perceived positively by the market. Despite this growth, the Bank Of Canada (BoC) is still expected to lower interest rates in July, providing support for USD/CAD.
US inflation data, particularly the PCE Price Index, showed a cooling in May, causing further downside pressure on USD/CAD. The decline towards the Fed’s 2.0% target slightly increased the probability of a September interest-rate cut. Fed Bank of San Francisco President Mary Daly acknowledged the cooling inflation data as a positive sign.
From a technical perspective, USD/CAD remains range-bound after a failed attempt to break out of a Symmetrical Triangle pattern in June. Price action has been bearish, but a break above 1.3791 could confirm a bullish move towards 1.3850. Conversely, a break below 1.3624 would indicate a downside breakout with a target at 1.3590.